Winning strategies used by challenger brands

It is a general truth that each product category has one leader and many followers. The brand leader – also called the Dominant – is in many cases the creator of that particular category, i.e. the first brand that was in market and established the rules of it. And for this reason, and many more, he is the biggest player, the one that not only has a higher penetration rate, but also has customers that spend more.
Under such circumstances, the other brands in the market – the followers – live together in what is called “the middle ground”, hoping to gain a piece of the Dominant’s market share and one day to become themselves the brand leader in the category.
In order to accomplish this they need not only to think like a Challenger but, more importantly, to behave like one as well. This means, on the one hand, challenging the rules of the market they are in and, on the other, reframing the consumer’s selection criteria by offering him a different kind of emotional engagement with the category.
Over the years, many brands have succeeded in becoming a strong Challenger by using different strategies. In the following, we discuss a few examples of these kinds of strategies.

Thinking up-stream of the category

When you want to be a Challenger brand you cannot behave like other followers or communicate the same message as the Leader. In order to build a distinct positioning in your category, the first step is to ask new questions about your category and your consumers. And you have to ask not just new questions, but better still, up-stream questions. So, instead of asking “Why is the category about this?” you should ask yourself “Why isn’t the category about that?” The aim of this change of perspective is to discover a new insight that can help you to emotionally engage your consumer with your brand.
One example of a brand that has been successful by asking better questions is Axe. Starting like an outsider, the brand needed a new direction when it was won by BBH. As Hegarty describes it, back then all the advertising in this category depicted some seriously aspirational hunk, and the whole story was built on a problem – solution template. The solution found by the London-based agency was to create a dialogue with the consumer based on a real problem. It was no longer about hunks, but about nerds who, with the “Axe Effect”, can get the girl they want.

Offering your consumer an identity, not a mirror

Back in the late 90’s Dove found itself in the mature and overcrowded market of FMCG’s. Then, as today, many brands were offering the “Holy Grail” of beauty, and communicated it using “That’s why” advertising.
Under these conditions, Dove managed to find an innovative insight and communicate it with impact, revealing the brand identity and positioning. In a market where all the players were only talking about beauty as something with clearly defined and intangible standards, Dove started communicating about real beauty, taking this a step further and educating the consumers in the category by showing them new criteria of choice – i.e. the real beauty.
Still today, they are maintaining momentum with the idea of real beauty that perfectly reflects the brand identity. Since the release of the campaign “Real Beauty” in early 2000, Dove’s strategy hasn’t changed. What has changed is the way they bring the idea to life.
The best execution of the “real beauty” idea is the 2013 campaign called “Beauty Sketches”. This was a work that created a lot of word-of-mouth among consumers, but also one that was highly appreciated for its creativity and the effectiveness, winning the “Titanium Grand Prix” at Cannes in 2013 and the Grand Effie in 2014.

The “over”-strategy

When we talk about Challengers we cannot omit the name Avis. They were the first to take a Challenger position and the ones that invented “the second brand positioning”. As Bill Bernbach explains it, Avis’s strategy was to state clearly a relevant truth for the consumer – namely that they are number 2 in the market and because of that they overcommit themselves to serving the client better than the leader, Hertz.
Like Hertz, most brand leaders normally operate with a “just enough” strategy. In order to have a chance, challenger brands must overcommit and, of course, over-perform. The over-performance happens especially at the product level.
In this new “Age of Brand Networks” (Amir), when people not only can smell the advertising jargon, but have an increased power of communication, brands must be truthful and say as simply as they can what they can do and admit what they can’t do.

The binary world or “The world of the 2 colas”

The first action of a Challenger brand should be to simplify the consumer choice. By simplifying the choice, the Challenger creates an advantage, especially if he is in a low-involvement category. The easiest way to do that is by creating a binary world.
One example for this is the Coke – Pepsi war. The cola category is dominated by two brands, but only after taking a daring step did Pepsi succeed in facing the dominant position of Coke. After years of copycat advertising and frustrating blind tests that showed that people actually preferred Pepsi over Coke, the brand woke up and took up a Challenger position by starting “The Pepsi challenge”. After this, Pepsi not only gained some share market, they also made the leader to respond to them, resulting in some free advertising for the brand.

Three markets, three levels of disruption, one brand

In the “Hall of Fame” of challenger brands, Apple stands out as a special example. First of all because it is the brand that challenged and succeeded in transforming three different markets: the personal computer market, the MP3 player market and the mobile phone market. Also in all these three markets, the disruption has taken place at all three levels: product, marketing and communication. It has managed to break every form of convention in each category – from representation convention to medium and product experience.
Secondly, Apple has not only managed to become a Brand Leader from a Challenger but has also succeeded in changing people’s perceptions, attitudes and expectations in all three categories and making them transfer these changes to markets that have no connection with the ones the brand is in: for instance the preference for white products – from personal computers to cars.
Decades ago, Stephen King defined three dimensions which can make a brand successful. These facts remain relevant in our complex world today, and any Challenger brand should consider them.
“First, it has to be a coherent totality, not a lot of bits. (…) Secondly, it has to be unique, and constantly developing to stay unique. (…) Thirdly, this blend of appeals must be relevant to people’s needs and desires, and immediate and salient. It must constantly stand out from the crowd; it must spring to mind. This will not of course be a static thing. It will constantly have to develop and to take the initiative to avoid me-tooism.”